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'Treasonous' tweets won't help Eskom out of current 'crisis'

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'Treasonous' tweets won't help Eskom out of current 'crisis'

Public Enterprises Minister Pravin Gordhan
Photo by Dylan Slater
Public Enterprises Minister Pravin Gordhan

6th December 2018

By: Terence Creamer
Creamer Media Editor

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Public Enterprises Minister Pravin Gordhan reported that a Cabinet task team would be appointed by President Cyril Ramaphosa soon to finalise a road map for turning around the debt-laden utility, which he acknowledged was in the midst of an operational “crisis”.

The “small” task team would work with the board and management on a five-year plan that will include a strategy for addressing the utility’s debt burden. Eskom’s debt has grown to nearly R420-billion and will peak at about R600-billion in the absence of any intervention to contain further increases.

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The plan would also involve a restructuring of the organisation, whereby there would be an initial functional separation of the generation, transmission and distribution components of the business, ahead of a possible legal separation at a later stage.

There was no intention, however, to privatise any of the vertically separated business units.

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Various support mechanisms are being considered to ease Eskom’s debt burden, but no decision has been made with regard to the nature or scale of the intervention, which has been described variously as “debt relief” and a “bail-out”.

It has been reported by Business Day that R100-billion of Eskom’s debt could be transferred directly across to the National Treasury, which has already extended R350-billion-worth of guarantees to enable the junk-rated utility to raise funding from the bond markets and development finance institutions.

Eskom chairperson Jabu Mbuza said the balance-sheet options, which had been stress-tested by Lazard, had not yet been formally canvassed with the National Treasury.

In addition, the operational restructuring options, which had been developed with input from the Boston Consulting Group, were still to be canvassed with stakeholders, including Eskom’s trade unions.

UNPLANNED CUTS
Gordhan said the immediate focus, though, was on the operational problems that had resulted in a return of growth- and confidence-sapping load-shedding in recent days.

The main problem currently related to a surge in unplanned outages, which had stripped between 9 000 MW and 11 000 MW of capacity from the system. These breakdowns coincided with peak summer maintenance of about 7 500 MW.

The supply constraint was being compounded further by the under performance of those Medupi and Kusile units that had been brought into commercial operation, including three units at Medupi and one at Kusile.

While Eskom has previously described the poor performance of the units as “teething problems”, Gordhan indicated that they could be more fundamental, particularly in relation to the performance of the boilers, the grinding mills and the fabric filters.

A forensic investigation was under way to understand the problems and the reason for the doubling in the capital budgets of the two megaprojects.

Gordhan said the probe could result in consequences for some of the original-equipment manufacturers and made specific reference to Mitsubishi Hitachi Power Systems Africa, which is supplying the boilers.

The Minister appealed for greater urgency from Eskom’s management and employees to address the current crisis and announced that senior managers had been assigned to specific power stations to address problems at the plants. In addition, a team of outside experts would be assembled to assist in diagnosing and addressing the operational problems.

It was also announced that none of the senior executives would take leave over the December period.

HANDS OFF
However, Gordhan also went on the offensive against those he described leading a “fight back” against government’s efforts to clean up corruption at the utility, as well as to stabilise it operationally.

In particular, he rebuked what he termed “treasonous” tweets being broadcast on social media.

Without mentioning any individuals by name, Gordhan lambasted “former managers, who like to issue Tweets”. He cautioned the individuals to “take their hands off Eskom” and advised them to “find a job that will keep you busy”.

"Of what interest is Eskom to these people today? Leave us alone. There is a brave management team and board that have a piece of work to do, let them do that piece of work."

Former acting CEO Matshela Koko, who is especially prolific on Twitter and critical of the leadership appointed by Ramaphosa, responded to the remarks on Twitter by suggesting that Gordhan was seeking to divert attention from the steep decline in the energy availability factor from the utility’s power stations to about 74%.

Gordhan defended the use of the word treasonous, which he acknowledged was a strong language.

"It is a [strong word], but undermining the electricity system, which undermines the economy and affects every citizen in this country, is treasonous. You can use it with a small 't' or a big 'T', make your choice."

The Minister also indicated that government was concerned that there might be an element of sabotage at play and indicated that investigations were under way to assess whether or not some of the current problems were the result of criminal activity.

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